Short-term debt maturity structures, credit ratings, and the pricing of audit services

Gul, Ferdinand A and Goodwin, John 2010, Short-term debt maturity structures, credit ratings, and the pricing of audit services, Accounting review, vol. 85, no. 3, pp. 877-885, doi: 10.2308/accr.2010.85.3.877.

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Title Short-term debt maturity structures, credit ratings, and the pricing of audit services
Author(s) Gul, Ferdinand AORCID iD for Gul, Ferdinand A
Goodwin, John
Journal name Accounting review
Volume number 85
Issue number 3
Start page 877
End page 885
Total pages 9
Publisher American Accounting Association
Place of publication Sarasota, Fla.
Publication date 2010-05
ISSN 0001-4826
Summary ABSTRACT: Short-term debt and credit ratings have benefits for financial reporting quality that may be associated with lower audit fees. Using U.S. data for 2003 through 2006, we find that short-term debt is negatively related to audit fees for firms rated by Standard & Poor’s, consistent with more monitoring and better governance mechanisms in firms with higher short-term debt. Credit ratings quality is negatively related to audit fees, consistent with ratings quality reflecting a firm’s liquidity risk, governance mechanisms, and monitoring from rating agencies. We also find that the negative relation between short-term debt and audit fees is stronger for firms with low-quality credit ratings, consistent with auditors pricing lender monitoring.
Language eng
DOI 10.2308/accr.2010.85.3.877
Field of Research 150102 Auditing and Accountability
1501 Accounting, Auditing And Accountability
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2010, American Accounting Association
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Document type: Journal Article
Collections: Faculty of Business and Law
Department of Accounting
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